What the Heck is an Earnest Money Deposit?
For those who have played in the real estate game, the term earnest money deposit may be old hat. However, for those new to buying a home, the phrase may be completely foreign. In simple terms, an earnest money deposit is a good faith deposit – a signal that the buyer is seriously interested in a property. While this can be a negotiable amount, it is not to be confused with a down payment. How much do you need to deposit? The amount of money acceptable varies from purchase to purchase, and may take in a number of factors. In areas where the market is hot, or strong, the buyers with the larger earnest money deposit offer may show the seller that they are more serious than others vying for the home. Depending on the part of the country, such as coastal cities, earnest money deposits could be as high as 5% (or more) of the sale price. In smaller communities, it could be as low as $500 to $1,000. Monies can be in the form of a personal check, a cashier’s check, a money order or cash. Don’t
